Microsoft Bings Yahoo

The ten-year partnership deal links the two mega-sites in web search.
Yahoo's interface will remain the same but its search will be powered by
Microsoft's recently-ramped up search engine, Bing. Though Google is the search
engine of choice for over 70% of all internet searches, the deal unifies the #2
and #3 in the search line.

The deal
guarantees Yahoo an 88% profit for all searches conducted on Yahoo/Bing over the
next five years. This may allow the website to stay afloat, retool, and refocus
as it shifts its attention from power search to building out its other portal
features. Yahoo expects the partnership to add about $275 million to annual
operating cash flow.

This comes after Microsoft offered over $45 billion to acquire Yahoo in early
2008. Analysts wonder if Yahoo got the short end of the digital stick this time
around. Beyond the 88% of initial search revenue, compared to the 100% it
received when it was on its own, there is not much else
chalked out for Yahoo in this deal.

However, Yahoo will get to keep its identity and its company. It may be that
it is 'buying' time and resources to redefine and resituate itself in the
changing and social media-focused world of Web 2.0.

Yahoo shareholders are not so sure...the company's stock fell 12% yesterday
after news of the deal was made public.